In an effort to lessen some of the pain of filing income tax returns, the Internal Revenue Service is testing a new computer system built by a Maryland company that lets taxpayers file by simply punching in numbers on the telephone.
For the last few years, the IRS has offered taxpayers the chance to file their tax returns electronically through authorized outlets. But the new system goes a step further and brings electronic filing into the home.
The $250,000 system, called TeleFile, was developed by Germantown-based Microlog Corp., a leading supplier of telephone computer systems.
In addition to automatically calculating a taxpayer's refund or tax, TeleFile also promises to cut the waiting time for refunds to two or three weeks -- about half the normal time.
So far, though, taxpayers can only use it if they live in Ohio.
"It's all part of the tax system modernization," said Sam Serio, an IRS spokesman in Baltimore. He warns that it is just a test and could be shelved like other recent projects to simplify tax filing.
To use TeleFile, the taxpayer calls an 800 number and then punches in his or her social security number and a two-letter code. A computer voice then directs the caller to punch in gross income, the amount of federal taxes withheld, and interest and dividends earned during the year.
The tax or refund is immediately calculated, told to the taxpayer and stored in the IRS computer system. If a refund is due, the computer also starts the process for sending it out.
The taxpayer must mail in a special tax return and a W-2 wage form.
"When you punch in those numbers, they are converted into computer information immediately, and no one has to put them in by hand," Thomas K. Horton, a spokesman for Microlog, said.
Besides reducing the amount of time for filing and receiving a refund, the system reduces errors in computations and lowers the cost of processing for IRS, Mr. Horton said. TeleFile could eventually be adapted to more complex federal tax returns and state tax returns, he said.
The use of the new system, housed in the IRS Cincinnati service center, is being offered to 1.2 million Ohioans who are eligible to use the simple 1040EZ return.